The Prime Minister has promised to tackle late payments as part of a major support plan for small businesses, warning large firms that “it’s time to pay up.”

Keir Starmer said too many business owners are wasting “precious hours” chasing overdue invoices, which he called unfair and exhausting. The new rules will give the small business commissioner the power to fine repeat offenders and enforce stricter payment timelines.

“We’re tackling the scourge of late payments once and for all,” said Starmer. “It’s holding Britain back.”

Under upcoming legislation, firms will be legally required to pay suppliers within 30 days unless otherwise agreed, and must not exceed a maximum of 60 days, falling to 45 over time. The commissioner will be empowered to carry out spot checks and penalise those who persistently fail to pay on time.

The reforms form part of a broader package aimed at reviving the UK’s small business sector. The Government plans to channel £4 billion into start-ups and scale-ups, including £1 billion for 69,000 start-up loans and new mentoring support.

Business Secretary Jonathan Reynolds said the plan, the first of its kind in over a decade, would give entrepreneurs more time and money to focus on growth. “We want to unleash their full potential,” he said.

The opposition dismissed the measures as too little, too late. Andrew Griffith, Conservative shadow business secretary, said Labour’s approach would not help the 218,000 businesses that have closed since it came to power.

Griffith accused the Government of strangling enterprise with higher business rates and employment taxes, while claiming the Conservatives were the true champions of British business.

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